William C. Atwater & Co. v. Panama R. Co.
| Citation | 159 N.E. 418,246 N.Y. 519 |
| Parties | WILLIAM C. ATWATER & CO., Inc., v. PANAMA R. CO. |
| Decision Date | 16 December 1927 |
| Court | New York Court of Appeals |
OPINION TEXT STARTS HERE
Action by William C. Atwater & Co., Inc., against the Panama Railroad Company. Judgment of Special Term entered on report of referee in favor of defendant was affirmed by the Appellate Division, First Department (218 App. Div. 716, 218 N. Y. S. 938), and plaintiff appeals.
Reversed.
Appeal from Supreme Court, Appellate Division, First Department.
Wilson W. Thompson and Edward M. Bassett, for appellant.
Richard Reid Rogers, for respondent.
The action is brought to recover damages for breach of a contract for the purchase of coal. The contract was made on July 28, 1920. Plaintiff agreed to sell, and defendant to buy, 36,000 tons of coal at an agreed price. The contract ran from August 1, 1920, to July 31, 1921. The coal was to be delivered in approximately equal monthly installments, at the rate of 3,000 tons a month. Plaintiff's contention is that defendant refused to accept some 12,500 tons which it was obligated to receive under its contract by July 31, 1921, and that it has been damaged thereby the difference between the contract price and the lesser market value of the coal.
The case was tried before a referee. He found that, by the terms of the contract, no recovery could be had for breach of contract for any portion of the tonnage remaining unshipped on July 31, 1921, and dismissed the complaint. The Appellate Division unanimously affirmed the judgment of dismissal.
Plaintiff operated a coal mine in West Virginia. It had many large contracts for future shipments. Under existing conditions, it was not disposed to bind itself absolutely to deliver the coal in regular monthly portions. It accordingly protected itself by carefully worded provisions in the contract against possible liability for undelivered tonnage. All deliveries were subject to war conditions, insurrections, mine disasters, or breakdowns, fires, accidents, shortage of cars, or interruptions of car service, strikes, labor agitations, or disturbances, shortage of labor supply, or any other causes beyond its control. If by reason of such causes the production of plaintiff's collieries should be less than their normal maximum capacity, tonnage to be delivered under the contract might at the option of the seller be reduced without liability on the part of the seller for such reduction. In case of strikes or accidents unavoidably causing the stoppage of the works or the business of the purchaser, the purchaser might request deliveries to be suspended during such stoppage, and the tonnage, of deliveries so suspended would be canceled.
Then comes the following clause:
‘4. Unless otherwise specified, all coal sold under this contract must be ordered and taken by the purchaser regularly, in substantially equal monthly proportions; otherwise the seller shall without notice to the purchaser at any time during the contract period, have the right to cancel any tonnage of coal not taken by the purchaser
up to that time. In such case the seller shall also have the right to reduce the tonnage of shipments during the remainder of the contract period to the basis of average monthly deliveries which have been previously taken by the purchaser. Any portion of the tonnage remaining unshipped at the date of expiration of this agreement shall be considered as canceled without notice.’
During August, September, and November, 1920, plaintiff was unable to deliver the full 3,000 tons a month called for by the contract, but on January 31, 1921, it claims to have delivered in full both the current and the deferred tonnage. On March 7, 1921, defendant refused to take any coal for its account after that date, and refused to order any future deliveries.
[1] On July 31, 1921, the date of the expiration of the agreement, plaintiff claimed that a balance of upwards of 12,500 gross tons remained unaccepted and unpaid for by the defendant. The case was disposed of by the learned referee on his reading of the last clause of paragraph 4 of the contract, quoted above, which, he held, became self-operative at the termination of the contract, and a bar to any cause of action by plaintiff for breach by defendant of its contract to order and receive coal.
‘Any portion of the tonnage remaining unshipped at the date of the expiration of this agreement shall be...
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